In Corazon’s experience, the service line management concept, when applied in healthcare, provides an effective means to achieve the full potential of a hospital specialty program. Through the use of this concept and the designation of a ‘program champion’, hospitals are in a better position to maintain their focus on the development needs of their strategic service lines. In many cases, strategic service lines include cardiovascular, neuroscience, orthopedic, and oncology programs, to name a few. However, the definition of ‘strategic’ will certainly be organization-specific, which drives the programs included in this group and carved out as designated service lines.
The aim of effective service line management should include the achievement of physician and hospital integration goals, excellence in clinical outcomes, improved relationships with internal and external customers, gains in operational efficiencies, and a positive economic impact on the hospital’s bottom line. We strongly believe that the organization of clinical services into distinct service lines can differentiate hospital programs and thus create a competitive advantage for an organization. However, in order to be effectively managed, a hospital must first identify and secure the talent necessary to lead this endeavor. Unfortunately, acquiring qualified talent is easier said than done.
The candidate pool for effective service line leaders can be very limited, depending upon the content expertise required. For example, the pool for cardiovascular service line administrators is typically larger than what exists for their counterparts in the neuroscience programs. This may simply be due to the fact that more hospitals have organized cardiovascular services into distinct service lines for a longer period of time. Therefore, more administrators have had experience working in this mode. Although there is currently a shortage in the availability of qualified neuroscience service line leaders, recent innovations in care, rapid growth in primary stroke center development, and a growing regulatory emphasis on effectively caring for stroke patient populations will likely change this situation quickly.
As patient care innovations continue to drive service expansion, particularly in what were traditionally the ‘community’ providers, the supply of qualified candidates may diminish and thus fuel the competition for these service line ‘champions’. Although there are many components in a complete recruitment package, compensation is certainly near the top of every candidate’s list of considerations. For that reason, Corazon undertook an effort to conduct an updated compensation survey that provides some insight into actions progressive cardiovascular and neuroscience programs are doing to recruit and retain key leadership. Data was collected via a web-based survey from May through November of 2011, and our analysis was finalized in January of this year. In this article, we share some select results from the cardiovascular portion of the survey. If you have a particular interest in receiving a full copy of the survey, please contact Corazon.
The findings from this survey affirmed some of the initial assumptions we had prior to collecting the data. For instance, as you may expect, we found a direct correlation between average compensation and the title/level of the position in the organization. The same correlation exists between title/level of the position and the number/size of bonus opportunities available to the person in the role. However, the findings did not support the idea that the geographical area or functional responsibilities of the role have a greater influence over average compensation than the hospital’s size.
Of the responses received, roughly three-quarters of the hospitals are located in regions east of the Mississippi River. Therefore, the findings from this survey will be more representative of compensation structures in the Northeast, Southeast, and Midwestern regions of the United States. Additionally, over 95% of the cardiovascular survey respondents are working in programs with interventional and/or surgical capabilities. Therefore, the findings may not be as relevant to programs with low-risk diagnostic caths or non-invasive studies as the highest level of offered care. With the idea that service line leaders may need a strong title to be successful, we asked:
What is the position title for your service line leader?
To be effective in a service line leadership role, whether one has an appropriate title or not, the administrator must have a reporting structure that supports quick decision making. In addition, the service line must be able to ‘turn on a dime’ when necessary, and be in a position to make decisions that demonstrate to key specialists that their opinions are valued and leadership of the service line has authority. In our experience, ineffective leaders may just be the result of working in a culture that is slow to make decisions, or one where all decision-making authority rests only at the top level of the organization. In order to attract the right talent, a hospital must consider what position the service line reports to, and how much the service line administrator will be empowered to make decisions. To this extent, we wanted to know:
To whom in the organization does this position report?
Once the decision is made as to whom the service line leader reports to, next the hospital needs to consider the functional areas that are the accountability of the service line leader. This decision can vary by institution. In Corazon’s experience, the decision of what areas report to the service line is directly dependent upon the size and scope of the program itself. Many times, the question of whether nursing units should report to the service line or whether they should report to nursing is hotly contested. From a service line perspective, we recommend applying the 80-20 rule. In instances where 80% or more of the services provided on a specific unit are directly related to cardiovascular services, the unit itself should have a direct reporting relationship to the service line leader. However, the service line administrator should in turn have a matrix-type reporting relationship to the Chief Nursing Officer or Vice President of Patient Services, if they do not already have a direct reporting relationship to the person in this role.
With reporting issues aside, the primary focus of this survey was to gain a better understanding of the rate providers were paying key service line leaders to work their organization. When reviewing the responses, cardiovascular service line leaders in programs with cardiac surgery capabilities had an average minimum salary of $119,973, an average mid-point salary of $141,915, and an average maximum salary of $163,428 (annually). For those working in a program without cardiac surgery capabilities but with interventional capabilities, their role had a range with an average minimum salary of $87,188, an average mid-point salary of $107,243, and an average maximum salary of $120,875 (annually). When blending the average salary ranges, and comparing them to similar surveys conducted by Corazon in 2006 and 2008, we found that the average minimum and maximum salaries have increased by 19.9% and 16.5% over the past five years, respectively. Table 1 demonstrates this upward trend.
In Corazon’s experience with recent openings, cardiovascular service line leaders of full-service programs are commanding average salaries ranging from $150,000 to $190,000, depending on the size and scope of the program and size of the organization. The overall scope of responsibilities, position title, and credentials of the candidate selected are considered as well.
With the intent of incentivizing exceptional performance, we are a proponent of including a variable pay component in the overall compensation package for a service line leader. For that reason, we wanted to know whether these positions were eligible for a bonus and if sign-on incentives were utilized when recruiting. In roughly two-thirds of all respondent hospitals, sign-on incentives were utilized as part of the offer. Additionally, 73% of the positions were eligible for a performance bonus, with bonus opportunities ranging up to 25% of their base compensation. However, the majority of bonus-eligible positions had a bonus opportunity of 10-15%. As always, when developing a compensation package for this position, salary and wage practices should be based on fair market value and potential internal equity issues should be considered. Yet it is also important to understand the potential impact the service line has on the organization’s bottom line, and the recruiting challenges an organization will face when competing for top talent to lead its program.
The careful selection of service line leadership is essential to ensure programmatic success. These individuals must be champions for ALL customers of the program, whether the physicians, members of administration and hospital staff, patients, and/or the community the hospital serves. This leader will be asked to be the go-to person for the service line and must be empowered to get the job done, dealing with all the issues tied to the direction and management of the program. Therefore, the hospital should take care to identify not just the person with the right qualifications, but also the right talent that is the best fit within the organization’s unique culture.
David is a Vice President at Corazon, Inc., offering strategic program development for the heart, vascular, neuro, and ortho specialties. Corazon offers a full continuum of consulting, recruitment, interim management, and physician practice and alignment services for hospitals and health systems across the country and in Canada. To learn more, or to receive a full report of survey findings, call (412) 364-8200 or visit www.corazoninc.com. To reach David, email firstname.lastname@example.org.